AMC Entertainment Holdings Inc . AMC ) reported mixed third-quarter 2017 financial results wherein loss was narrower than the Zacks Consensus Estimate and revenues surpassed the same.
Net loss on a GAAP basis was $42.7 million or a loss of 33 cents per share compared with a net income of $30.4 million or 31 cents in the prior-year quarter. The third-quarter 2017 loss per share of 33 cents was narrower than the Zacks Consensus Estimate of a loss of 37 cents.
AMC Entertainment Holdings, Inc. Price, Consensus and EPS Surprise
AMC Entertainment Holdings, Inc. Price, Consensus and EPS Surprise | AMC Entertainment Holdings, Inc. Quote
Total revenues of $1,178.7 million surged 51.2% year over year and surpassed the Zacks Consensus Estimate of $1,156.4 million. Segment wise, Admissions revenues increased 51.7% year over year to $753.5 million in third-quarter 2017. Food and beverage revenues increased 45.2% year over year to $361.4 million. Other theater revenues were $63.8 million, soaring 87.1% year over year.
Quarterly operating costs and expenses increased to $1,183 million, up from $714.3 million in third-quarter 2016. Operating loss was $4.3 million as against an operating income of $65.5 million in the year-ago quarter. Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $147.4 million, up 2.1% year over year. Adjusted EBITDA margin was 12.5% compared with 18.5% in the year-ago quarter.
AMC Screens & Theatres
During the quarter under review, the company opened two theatres with a total of 22 screens, and acquired two theatres with 15 screens. The company permanently closed 21 screens, temporarily shut 176 screens and reopened 123 screens to implement its strategies and install consumer experience upgrades. As of Sep 30, 2017, the company owned or operated 1,006 theatres with 11,046 screens across 15 countries.
Number of screens operated was 8,028, compared with 2,679 million in the year-ago quarter. Average ticket price was $9.80 compared with $8.81 in the year-ago quarter. Consolidated attendance was 54,269 million compared with 25,182 million in the year-ago quarter.
Cash Flow and Liquidity
In the third quarter of 2017, AMC Entertainment generated $119.3 million of cash from operations compared with $77.3 million in the year-ago quarter.
At the end of third-quarter 2017, AMC Entertainment had $260 million of cash and cash equivalents and $5,140.3 million of outstanding debt compared with $207.1 million of cash and cash equivalents and $4,467.4 million of outstanding debt at the end of 2016.
Share Repurchase Program
On Aug 3, the board of directors of AMC Entertainment approved the repurchase of up to $100 million of the company's Class A common stock over a two-year period.
As of Nov 3, the company repurchased more than 30% of the authorized $100 million, having bought more than 2 million shares of Class A common stock for approximately $30 million, representing an average share price of $14.86.
On Aug 3, the company declared a dividend of 20 cents per share for the quarter ended Jun 30, which was paid on Sep 25, to shareholders of record as of Sep 11. Total dividends paid in the third quarter of 2017 were approximately $26.2 million.
On Oct 27, the board of directors announced the fifteenth consecutive quarterly dividend of 20 cents for the quarter ended Sep 30, payable on Dec 18, to stockholders of record on Dec 4.
AMC Entertainment has updated its guidance for fiscal 2017, based on the results for the first nine months. The company expects total revenues in the range of $5-$5.20 billion. Net Loss is pegged between $175 million and $155 million. Adjusted EBITDA is expected between $810 million and $865 million. Gross Capital Expenditures and Net Capital Expenditures are estimated between $600 million and $670 million and $500 million and $550 million, respectively. Total number of attendees should is projected around 340-350 million while total average screens are pegged at 10,650-10,700.
The company, however, does not intend to update or provide guidance for subsequent years beyond fiscal 2017.
AMC Entertainment has announced its latest addition - AMC Tech Ridge 10 - in alliance with Seritage Growth Properties SRG . Construction of the new theater is scheduled to begin later this year and it is anticipated to open in 2019 in Austin, TX.
AMC Entertainment's initiative to identify approximately $400-million non-strategic assets and monetize them strategically and systematically looks impressive. The company sold 12 million shares of National CineMedia, Inc's NCMI common stock to Standard General, L.P. for approximately $73.1 million. AMC Entertainment also sold 2.8 million shares of National CineMedia, Inc's common stock to an undisclosed American buyer for approximately $18.2 million.
AMC Entertainment competes with major theatrical exhibitors like Cinemark Holdings Inc. CNK , Live Nation Entertainment Inc. and Regal Entertainment Group. The company also faces threats from alternative movie streaming services such as Netflix, Inc, Time Warner Inc.'s HBO Now and Hulu.
AMC Entertainment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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